AUDUSD - Volatility Contracting Ahead of RBA
The AUD has seen a very tight range last week, across the board. Tomorrow we will get the RBA's decision and that will likely be the catalyst for a pickup in volatility.
We believe the odds are for a dovish hold...which might disappoint the markets.
Last week RBA Governor Lowe noted the difficult external environment, but he also repeated three times that the Australian
economy was at a "gentle turning point", suggesting he was not going to rush into further easing after the June and July rate cuts.
So despite some worse employment figures,
it seems like a cut is by no means a done deal.
Look to buy AUDUSD on a disappointment of the market's rate cut expectations.
We believe the odds are for a dovish hold...which might disappoint the markets.
Last week RBA Governor Lowe noted the difficult external environment, but he also repeated three times that the Australian
economy was at a "gentle turning point", suggesting he was not going to rush into further easing after the June and July rate cuts.
So despite some worse employment figures,
it seems like a cut is by no means a done deal.
Look to buy AUDUSD on a disappointment of the market's rate cut expectations.